German Banker Calls British Move Harmful

September 17, 1992|By ROBERT WEISMAN; Courant Staff Writer

WEST HARTFORD — A top German banker Wednesday bemoaned Britain's financial moves as a blow to European economic unity, predicting they would fuel monetary turmoil and postpone consolidation of currency into the next century.

"We've certainly been taken back years by today's [British] moves," Klaus Friedrich, first vice president and deputy chief economist of the Dresdner Bank Group, the second-largest financial institution in Germany, said in an interview shortly before addressing a University of Hartford audience Wednesday night.

Friedrich said he was convinced, however, that European nations, with or without Britain, would restore a system of exchange rates -- most likely with a stronger German mark.

"There will have to be a major realignment of European currencies in which the German mark will have to be appreciated," Friedrich said.

Friedrich had just flown across the Atlantic Ocean to be the lead speaker at a four-part University of Hartford lecture series on "The New Germany: Between East and West."

Friedrich was clearly agitated upon learning that Britain had abandoned the falling pound to the market Wednesday after failing to prop it up by purchasing huge amounts of it and boosting interest rates.

Underscoring the sense that cooperation among Western Europe's powers may be fracturing, Friedrich said, "We are learning that, perhaps, we haven't grown together as much as we would have liked to think.

"It doesn't mean the end of the European integrative process. But as someone who favors European unity, this is certainly a setback."

Friedrich said the British moves may render irrelevant this weekend's vote in France on ratifying the system of exchange rates between European countries. "What would be the point of a [French] vote?" he asked rhetorically. "Who wants to vote on a dead horse?"

Despite the economic anxiety sweeping Europe, Friedrich said he

doubted Wednesday's developments would affect the U.S. economy or American businesses in the short term, other than to make it slightly cheaper to visit Britain.

Friedrich, the former European director of the Washington-based Institute of International Finance, is the author of a book and numerous articles on global economics and finance. He holds a doctorate from Cornell University and has taught at Pennsylvania State University.

"Germany wants to be a European country," Friedrich said Wednesday. "It doesn't want to go east as a regional superpower. It wants to go east as a member of a European community."

Referring to the recent spate of neo-Nazi violence against immigrants to Germany, he said, "We're having problems with the right and with the xenophobia. The solution is to become more European."

Friedrich also said he expects to see more international business collaborations, such as the one forged between Hartford's United Technologies Corp. and Germany's Daimler Benz, in the coming decade.